S.J. housing market: We're No. 1

San Joaquin County home price gains led the nation's metropolitan areas with a one-year increase of more than 19 percent, according to the Federal Housing Finance Agency's House Price Index.

Reed Fujii

San Joaquin County home price gains led the nation's metropolitan areas with a one-year increase of more than 19 percent, according to the Federal Housing Finance Agency's House Price Index.

Nationwide, upward momentum in housing prices remained strong in the second quarter as prices rose 2.1 percent from the previous quarter and 7.2 percent over the past year, the agency reported Thursday.

This is the eighth consecutive quarterly price increase in the purchase-only, seasonally adjusted index.

"The housing market experienced one of its strongest quarters since the boom in the middle of the last decade," said Andrew Leventis, the agency's principal economist.

Jeffrey Michael, director of the Business Forecasting Center at University of the Pacific, said it's a remarkable turnaround for San Joaquin County - demographically known as the Stockton metropolitan area - and other Central Valley communities that sank to the bottom of the agency's index during the foreclosure crisis.

"If you go back to 2008, 2009, the bottom of the list was always Merced, Modesto, Stockton ... of the roughly 300 metro areas that are ranked," he said from his Stockton office.

Michael also noted one reason that the current price appreciation is so strong is the area housing market had fallen so far. That is a history shared with other appreciation leaders.

In the one-year period that ended June 30, San Joaquin County's one-year gain of 19.4 percent topped No. 2 Phoenix at 18.5 percent; Las Vegas, 17.6 percent; Bend, Ore., 16.7 percent; and in fifth place Stanislaus County, 16 percent, according to the report.

But Michael said it's a positive development in an area where many still owe more on their mortgages than their houses are worth.

"In this context of what Stockton's been through in the foreclosure crisis, and under-water homeowners, and the need to get prices back up and restore normality to the economy, this is one case where it's really good news," he said.

The agency's report is only the latest of a string of reports of strong housing price gains.

The California Association of Realtors reported this week that the median price of an existing, single-family detached home in San Joaquin County jumped 8 percent in July from June to $225,000. For the year, that was up nearly 34 percent.

The agency's index tracks average house price changes in sales or refinancing on the same single-family properties based on data from Fannie Mae and Freddie Mac for mortgages originated over the past 38 years.

The index tends to be less volatile than median price reports, Michael said.

It's also useful in that it tracks housing prices in nearly 300 U.S. metropolitan areas. The widely quoted Case-Shiller Index details only the 20 largest metro areas, for example.